The first deadline for student-loan borrowers to pick a new repayment plan is approaching after a 30-day extension
After receiving 30-day "final notices" to transition off the SAVE plan, the first batch of student-loan borrowers has to take action by November.
Borrowers of student loans face a looming deadline to choose a new repayment plan, as the 30-day extension expires at the start of November. President Donald Trump's administration will automatically place those who do not opt for a different plan into a standard or tiered repayment option, which are more expensive than the SAVE plan.
SAVE, an initiative under the Biden administration, allowed borrowers to have lower monthly payments. Initially, the deadline for switching plans was set for the end of September, but borrowers received a final notice granting them an additional 30 days to make a selection, pushing the deadline to November 1. Currently, nearly 2 million out of 7.5 million borrowers on SAVE have chosen a new plan, while others are receiving their final notices in batches from various servicers.
The Education Department suggests borrowers enroll in the new Repayment Assistance Plan, an income-driven option that became effective on July 1, but some borrowers have reported higher payments compared to SAVE. The looming deadline comes amid a surge in student loan defaults, with 9.3 million borrowers already in default and another 1.3 million expected to default within the next six months.
Many borrowers fear the repercussions of default, which can include wage garnishment and loss of federal benefits like Social Security.
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